Fast Moving Consumer Goods (FMCG) Summit Issues and Opportunities - (Export / Import) - Part - 4 Over the years, the FMCG companies have targeted overseas markets like Bangladesh, Pakistan, Nepal, and Middle East because of the similar lifestyle and consumption habits between these countries and India.

1. FMCG Industry Overview
(Export / Import)
Fast Moving Consumer Goods (FMCG) Summit
Issues and Opportunities
Part - 4

2. Advantage Assam

3. Export / Import
Over the years, the FMCG companies have targeted overseas markets like
Bangladesh, Pakistan, Nepal, and Middle East because of the similar lifestyle and
consumption habits between these countries and India. But this effort has
achieved limited success as exports continue to remain a very small proportion
of the overall production. Processed foods and personal care products are the
key export items in the FMCG space.

4. Export / Import
Off late, the trend is that many FMCG firms are importing more than they are
exporting. Imports include raw materials and spare parts. Typically, companies
import raw materials which are available at a cheaper cost in other locations.
Example- palm oil for making soaps is imported from Indonesia because it is
cheaper than purchasing locally.

5. Export / Import
Despite having manufacturing facilities in India, the country has not emerged as
an export hub for FMCG companies. This is on account of several factors –
a) Many FMCG firms have manufacturing units located abroad, so exporting
from India is less viable
b) The size of export market in nearby countries such as Bangladesh and Sri
Lanka is low

6. Export / Import
a) Lack of cost arbitrage in FMCG segment compared to other sectors such as
information technology and automobile components, where India has an
advantage of skills and low labour costs
b) Restrictions on exports up to 10% in particular categories of products.

7. Growing contribution from rural markets –
Several FMCG companies have been investing to expand rural reach in the
past few years. HUL nearly trebled its rural presence in the past three years,
while Britannia and Godrej Consumer doubled their direct distribution
network and P&G stepped up investment to push mass priced products. The
rural contribution to overall FMCG revenue has gone up from 30% five years
ago to 33% now, on the back of increased government focus and support to
the rural segment in the form of investments in rural infrastructure, higher
minimum support price on crops, employment guarantee schemes, etc. All
this has increased farm income and boosted demand for FMCG products.
Recent Trends

8. THANK YOU
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